Mining Lignite Coal for our Energy Future

News

Extreme weather conditions are part of living in North Dakota. It is hot in the summer and cold in the winter. Those temperature extremes are also when electric customers use the most power, which means the power plants need a dependable source of fuel. For the Milton R. Young Station, the supplier for the past 40 years has been BNI Coal’s Center Mine.

Winter conditions present challenges to the employees of the Center Mine, but it also has its advantages including stable road surfaces that make it easier for haulers to navigate the mine site.

At the Center Mine, near Center, North Dakota, the employees know all about changing seasons and the changes in operations to meet the seasonal challenges.

“Cold winter weather means more stress for both employees and equipment,” said Mike Heger, production manager at the Center Mine. “The weather changes, but the things that remain constant at the mine are a focus on safety and our culture to do things right.”

Heger says that winter actually has a couple of advantages to mining coal. One is that employees are generally at work because they take their vacations in the summer when the weather is nice. The second is that the ground is firm, which helps big earth-moving equipment when it’s traveling or moving earth.

The challenges are snow storms and extremely cold weather, such as minus 20 degrees, he said. Blizzards can shut a mine down because of lack of visibility. Also extremely cold weather is hard on equipment because frozen steel can become brittle.

Mike Heger, production manager for BNI Coal’s Center Mine.

“If it gets below minus 20, we’ll shut the dragline down rather than risk the equipment or the operators,” he added. The dragline is the largest earth-moving equipment at the mine and removes the clay that overlays the beds of coal.

Reclamation activities, such as spreading or collecting top soil or subsoil, stop during the winter. However, miners will use bulldozers to level spoil peaks left from mining activities and grade them to contours that will allow other reclamation activities to resume when spring weather returns.

Despite the challenges, the employees continue digging coal to meet the fuel requirements of the adjacent Young Station, which includes two separate units. During the year, the mine can supply up to 4.5 million tons of lignite coal.

Lignite – a soft coal that is about a third water – provides the energy to turn the water in the power plant’s boiler into a pure stream of steam that is used to turn a turbine and generate electricity. The Young Station provides electricity mostly to rural electric customers in eastern North Dakota and northwestern Minnesota.

BNI employs about 170 workers, with about 70 of them working per shift along with the office and support people. Normally, the dragline works 24-hours per day uncovering coal, but Heger said the mine shuts down for major holidays such as Christmas.

“It’s important that are employees spend Christmas with their families so we adjust schedules to make sure that we have enough coal stockpiled for the power plant to allow our employees time away from the mine,” Heger said.

About one-third of the miners at BNI Coal have worked there more than 30 years while about two-thirds joined in the last 10 years to replace many of the people who started working at the mine in the 1970s when the Young Station was built and the Center Mine began supplying fuel.

“Working in the lignite industry is a profession that people like because of the high wages, the benefits and the safe working conditions,” he added. “As the workforce has changed, we have worked very hard to maintain our focus on culture and safety, and we have been able to find new employees with experience in both mining and using large equipment.”

“Our customer is the Young Station and they expect us to deliver the fuel they need to operate reliably,” Heger said. “Our employees work hard and take great pride in what they do. Whether it’s a cold winter, a muddy spring or a hot summer, we’ve a proven track record of providing fuel that is low cost and delivered right to the power plant.”

BNI Coal is a subsidiary of ALLETE, which is headquartered in Duluth, Minnesota. ALLETE is also the parent company of Minnesota Power.

Sam E. McQuade, BNI’s new CFO, joined BNI at the end of July and will succeed Pat Clement who is retiring after 40 years with the company. McQuade brings an extensive and diverse business background to BNI in finance, accounting, mergers and acquisitions, and strategic leadership. He earned his accounting degree in the United States and his MBA in Switzerland, where he began his professional career. McQuade returned to the U.S in 2004, living in the greater New York City area and traveling the world on business. He returned home to North Dakota in 2013 and became CFO of AE2S in Grand Forks.

“I’m pleased to have attracted such high quality talent to our team,” said Wade Boeshans, BNI president and general manager. “It reflects the culture, reputation, and track record of our company and its employees. Sam’s background and experience will complement our team well as we execute our go-forward strategy.”

Paul Quist has joined BNI Energy as Manager of Business Development. The Manager of Business Development position was created to better position the company to execute its go-forward strategy. Paul will be leading BNI’s growth initiatives and supporting our energy solutions initiatives including the Allam Cycle initiative. Paul was previously employed with ESCO Supply managing their operations in North Dakota and Minnesota. Prior to joining ESCO, Paul worked with Basin Electric in their business development and CO2 marketing functions. He played a key role in Basin’s acquisition of Montana Lime Stone and Dakota Gasification Company by-product market development. Paul is also an adjunct professor at the University of Mary teaching economics.

Paul and his family live in Bismarck. Paul was elected to the Lignite Energy Council Board of Directors in 2015 and subsequently in 2016. Consequently, Paul is very familiar with the Lignite Industry, has great contacts within the Energy Industry, and work experiences that complement our team nicely. The culture, values and strategic vision of BNI/ALLETE attracted Paul to BNI. I think Paul is a great fit with our team and culture and am excited to have him on our team working closely with us to execute our go-forward strategy.

BNI Coal has a new parent company, BNI Energy, which will pursue opportunities in the energy sector, including carbon solutions in North Dakota. A new logo for BNI Energy and an updated logo for BNI Coal reflect the corporate structure change.

The new company will leverage the competencies and capabilities of BNI Coal and its deep roots in North Dakota’s lignite coal industry. A native North Dakota mining company, BNI Coal started mining in northwestern North Dakota in 1930 and has been mining lignite for the Milton R. Young Station since 1970 at its Center Mine location. Today, BNI mines about 4.5 million tons of lignite coal annually, supplying both units of the Milton R. Young Station.

Wade Boeshans, president and general manager of BNI Energy, met with employees Thursday to outline the vision and strategy of the new company.

“The creation of BNI Energy reflects the long-term direction of our company and future growth opportunities for our company and our team,” Boeshans said. “I am excited about the next chapter in BNI history as we secure our future while remaining committed to the lignite coal industry. I am excited about our strategy to pursue new opportunities and creative solutions. While we believe there is a promising future for BNI Coal in North Dakota, we also recognize the need for new and transformational solutions to realize it.”

“Increasing regulation has placed a priority and urgency on finding energy solutions that balance environmental concerns and the energy needs of consumers. BNI has been an energy leader for decades, and I’m excited about our natural progression into exploring other areas of the energy industry while advancing sustainable solutions for North Dakota,” said Robert J. Adams, ALLETE senior vice president – energy-centric businesses. “I’m also pleased to announce that Wade Boeshans, who has so effectively led BNI Coal, will take on additional responsibilities as president and general manager of BNI Energy.”

BNI Energy intends to explore opportunities in all forms of energy production, including value-added infrastructure services.

BNI Energy is partnering with Minnesota Power, Basin Electric Cooperative, and the Energy Environmental Research Center based in Grand Forks to develop a transformational coal technology, the Allam Cycle. The promising technology could yield an electric generator powered by lignite with nearly no emissions of carbon dioxide. In 2015, the partnership received a $1.5 million Lignite Research Council grant and $900,000 from the Department of Energy to help advance research for the design of an Allam Cycle plant using lignite as the fuel source.

“The research holds promise for North Dakota to continue to use its abundant coal resources while meeting proposed CO2 emissions standards and allow for future construction of lignite-fueled power plants to meet electricity needs,” Boeshans said.

Liberty, BNI Coal’s giant dragline, is generating a lot of local attention as it moves to its new location at the mine near Center, N.D.

The 9-million-pound dragline began its move in February, and crossed the DC Line and a county road Thursday. Cars of 30-40 residents lined the road and farmers came in from their fields to take in the rare sight of giant mining equipment on special wheeled vehicles.

Wade Boeshans, general manager and president of BNI Coal, said that at one point the relocation efforts were stopped in order to escort a school bus across the road.

“You could see all the kids’ faces pressed up against the window watching this massive machine as they went by. You know it’s a pretty big deal when the teenagers look up from their phones,” he said.

Crews had to drop a series of power lines, including a direct current transmission line linking Center with a substation near Duluth, to ensure proper clearance for Liberty. As of 11:30 a.m. today, Liberty was 2¾ miles from its destination. The dragline is expected to arrive at its new home late Friday afternoon or early Saturday.

Last year, the number of acres under permit at the Center Mine doubled to about 18,000 acres, and the dragline is making the eight-mile journey to a new area, located about four miles south of the Milton R. Young Generating Station. Nearly all the lignite coal mined by BNI is consumed at the Young station.

Liberty and the smaller Page dragline, which was moved earlier in February, are equipped with a “walking” apparatus that can propel them by way of gears and camshafts connected to two huge mechanical “shoes.” After much analysis, BNI officials determined that it would be more efficient, safe, and cost-effective to transport the draglines to the new location rather than “walk” them.

Photos from top to bottom:The Liberty dragline is on the move.
BNI, ALLETE and elected officials at a press event last week.

A Page 736 dragline, weighing about 2 million pounds, was lifted onto a special wheeled vehicle and moved to a new location at the mine site near Center, N.D., late Friday.

But last week’s move—as big as it is—is only the warmup for this week’s event. That’s when Liberty—BNI’s 9-million-pound dragline—will be on wheels. It will be the first time a dragline the size of Liberty is moved by a wheeled vehicle in North Dakota.

“The whole relocation process went very smooth,” said Wade Boeshans, general manager of BNI. “Our team did an exceptional job planning and communicating throughout the process. The contractor, Mammoet, was very well organized and demonstrated exceptional knowledge and expertise. I am very pleased with our team’s willingness to think creatively and take a risk. They navigated it all masterfully.

Both draglines are being moved as the lignite mine expands. Last year, the number of acres under permit at the Center Mine doubled to about 18,000 acres, and the draglines are being moved to Area C, about four miles south of the Milton R. Young Generating Station. The draglines remove the top layers of earth to expose the coal seams. They don’t actually dig the coal, but they make it possible for BNI to extract and deliver about 90,000 tons of coal a week. Nearly all the lignite coal mined by BNI is consumed at the Young station.

Mammoet, a Dutch company known as a world leader in engineered heaving lifting and transport, was hired to haul the two draglines on specially configured “self-propelled modular transporters.” These transporters have hydraulically-driven wheels pinned together lengthwise in “trains,” each powered by a 600-horsepower engine. Moving Liberty, a Bucyrus 8200 dragline, will require seven trains of transports 65 feet wide, with 197 axles and 877 pneumatic tires. The Page dragline requires 36 axles and 177 tires.

First, a series of 500-ton climbing jacks are placed around the dragline so the giant shovel can be lifted six to eight inches to make room to place the modular transporters underneath.

Liberty and the Page dragline are each equipped with a “walking” apparatus that can propel them by way of gears and camshafts connected to two huge mechanical “shoes.” After much analysis, BNI officials determined it would be more efficient, safe and cost-effective to transport the draglines rather than “walk” them as is traditionally done.

For one thing, using the modular transporters to move an enormous dragline is much faster than walking it—about one mile per hour compared to about seven feet a minute. Walking the draglines would be hard on the equipment and require more road construction and environmental expenditure. For most of the journey, the transporters will be able to roll down a BNI haul road.

During their eight-mile journey, the draglines must get past four high voltage power lines, including the DC Line that moves electricity from the Bison Wind Energy Center to a substation near Duluth. The power lines will be lowered before the draglines reach them and raised again afterward. A bridge and county road will be bypassed, and BNI built a special haul road to negotiate Hagel Creek.

Mammoet gained fame as a mover of heavy equipment in October 2000, when it was awarded a contract to salvage the Russian submarine Kursk, which exploded and sank in the Barents Sea. The company managed to lift the sub off the sea floor and bring it to the surface. Unexploded torpedoes, cruise missiles and two nuclear reactors were on board the vessel.

The number of acres BNI Coal has permitted for mining has nearly doubled. On Wednesday, the North Dakota Public Service Commission approved BNI’s application to add about another 8,500 acres to its existing permit.

With this approval the total number of acres under permit jumps to about 18,000 acres from the current 9,700 acres and clears the way for development of the site to continue on schedule. Roadwork and other surface preparation in Area C, about four miles south of the Milton R. Young Station near Center, N.D., is expected to begin this year with lignite mining to start in 2015. BNI expects the first year of production to yield about 2½ million tons of lignite.

“I am very pleased not only with the successful outcome but even more so with how we accomplished it, enhancing our relationships with community, landowners, and regulators while developing internal talent along the way,” said BNI President and General Manager Wade Boeshans. “No one on the team working on this permit application had previous experience obtaining a large mining permit. Jay and his team did an exceptional job.”

The Public Service Commission’s reclamation division commended BNI for its collaborative approach and community engagement throughout the permitting process, which started about three years ago following a long-range mine study. The division also pointed out that there were no public comments contesting the application.

The permitting process involved baseline analysis of vegetation, wildlife and archeology in the path of future mining, as well as ground and surface water monitoring and “compliance” drilling to analyze the lignite and soil and rock that lies over it.

“This permit addition was clearly a collaborative effort from all of the team members, all investing a significant portion of time since 2011, while assuring the compliance and permitting requirements of the active mining permits were still being met,” Volk said. “With the permit approval we not only gained more acreage, but we also gained significant experience as a department and have built stronger relationships with the regulators and local landowners.”

ALLETE Chairman, President and CEO Al Hodnik congratulated Boeshans and the BNI team.

“Energy rich North Dakota is integral to our multifaceted and multiyear strategy and BNI Coal has and continues to play a key role,” Hodnik said. “Wade Boeshans and his entire team have done a terrific job developing and executing a strategy in full harmony with our longstanding business partner Minnkota Power and North Dakota regulatory agencies. This outcome assures me that we are truly transferring our core values to the next generation and reminds us all that achieving the right results the right way pays the very best form of relationship dividends.”

The permit approval comes on the heels of a 10-year contract extension with Minnkota Power Cooperative in April. Almost all of BNI’s current lignite production is consumed by Minnkota’s Young Station.

BNI opened the Center Mine in 1970 and excavation and reclamation have proceeded in a westerly direction for the past four decades. Now BNI will take part of the company’s mining operation in a southerly direction while continuing its steady westward expansion. BNI has a long history of strong landowner and community relationships as well as a strong environmental record for its mine land reclamation efforts.